- CBA has sold its Indonesian-based insurance business for $426 million.
- The deal with the FWD Group is part of the bank’s strategy to exit insurance.
- The $3.8 billion sale of CommInsure Life in Australia to AIA Group is expected to complete in 2019.
The Commonwealth Bank has sold off more of its life insurance assets, whose operations have been subject to criticism in the financial services royal commission, this time its 80% interest in Indonesian business, PT Commonwealth Life.
The deal with the FWD Group is expected to bring $426 million to CBA with potential additional payments payable over time, subject to the performance of a distribution partnership.
CBA’s Indonesian banking business, PT Bank Commonwealth (PTBC), will enter into a 15-year life insurance distribution partnership with FWD.
“Providing our Indonesian customers with high quality products and services is core to our purpose to improve the financial well being of our customers and communities,” says PTBC President Director and Executive General Manager Indonesia, Lauren Sulistiawati.
“FWD is a leading pan-Asian insurance group and we are excited to work together to further enhance our life insurance product offerings and service to our customers.”
CBA says the deal is expected to result in a post-tax gain on sale of $140 million.
This latest deal follows the completion of the divestment of Sovereign in New Zealand to AIA Group in July.
The $3.8 billion sale of CommInsure Life in Australia to pan-Asian insurer AIA Group and CBA’s 37.5% interest in BoComm Life in China to Mitsui Sumitomo Insurance are still pending regulatory approvals.
These deals, which had been expected to close in 2018, are now expected to complete in the first half of calendar year 2019.
CommInsure has been hit by criticism of a drive for profit above people in the royal commission over an outdated definition of a heart attack, and other medical conditions, which the insurer used to deny payouts to customers.
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